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The Effect of Company Size on Aggregate Word-of-Mouth Valence

The authors examine the relationship between company size and online word-of-mouth (WOM) valence, a critical driver of consumer purchases. This relationship reflects not only the quality of consumers’ experiences with a company but also individuals’ decisions of whether to engage in WOM. Throughout five field studies, the authors find a negative relationship between company size and WOM that persists when controlling for the quality of consumers’ experience with the company. The negative effect has increased in size throughout the last decade. Subsequent experiments show that the effect occurs because consumers are more likely to engage in WOM about a larger (smaller) company following a low-quality (high-quality) experience. Large companies can mitigate this negative effect by responding frequently to WOM posts and using language that evokes empathy within these responses, for example by using emotional words, not using standardized responses, and addressing consumers by their names.